No. 494: Spatial Extension of Access Networks – an Economic Analysis

No. 494: Spatial Extension of Access Networks – an Economic Analysis

Authors: Martin Ockenfels, Dr Gabriele Kulenkampff


The use of fibre optic technology overcomes the technical length restrictions of a copper based access network and allows a significant expansion of distribution segments and overall access areas. The restrictions, which in particular are due to various attenuation effects of copper twisted pairs, do not apply to optical fibres. Therefore, it would be technically possible to spatially expand distribution areas and to enlarge access areas significantly. Such considerations are also often discussed in the context of merging access areas and resolving MPoP.

The technical aspects of spatial enlargement of access areas through fibre deployment have already been analysed in the WIK Discussion Paper No.493. In this paper, the analysis now focuses on the economic aspects. For this purpose a simple FTTH PtP cost model is developed in order to determine the investment per access line and its sensitivity towards spatial enlargement of access areas.

From an economic point of view, the length-dependent investments in cables and trenches constitute the major limiting factor for the spatial enlargement of access areas. The findings show that it is always more favourable to design the distribution area rather small. Actually, the number of buildings is more important than the absolute number of connections. The same applies to the feeder cable segment or backhaul connections. In certain cases, it is possible and sensible to combine neighbouring connection areas via backhauling. This is especially true for small access areas and short backhaul distances of no more than 10-15km.

Generally acknowledged design rules for the spatial scope of access areas, that suggest to align the layout of distribution areas with the capacity of the cabinet, could not be confirmed. Rather, it was shown that the length-dependent investments clearly dominate these considerations.

The model-based analyses presented here show that the performance of FTTH PtP access lines with regard to the technically achievable range (spatial extension) should generally not be exhausted due to economic considerations. Only in cases of isolated locations of end users or small settlements it is economically advantageous to merge an independent access area with a neighbouring one in order to reduce the total number of MPoP and thus access areas.

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